Dunedin Firefighters Association leaders say they're disappointed that the City Commission gave initial approval Thursday to an ordinance that puts excess money into the pension fund rather than using it to establish a new retirement benefit for firefighters.

Union officials say they negotiated their new contract on the assumption that firefighters would split some portion of $832,000 in pension reserve money with the city.

Expecting to receive as much as $400,000, they planned to use the money to start a share plan — an account in addition to their pension. Typically used to fund things like retirees' health care costs,the money can't be touched until after retirement.

But an annual actuarial report recently determined that the entire $832,000 should go to the city as reimbursement for extra benefits the city gave to firefighters over the last decade.

Union officials say they believe city negotiators had an inkling during bargaining about the actuarial report's final pension plan findings, but said nothing.

Claiming an unfair labor practice, the union unsuccessfully urged commissioners on Thursday to hold off voting on the pension plan and send both sides back to the bargaining table. A second public hearing and final vote is set for June 16.

"We took no raises this year on the premise we would get this share plan," said Mark Zipeto, union vice president and lead fire negotiator for Local 2327 of the International Association of Fire Fighters.

Commissioners said they believe the issue boils down to a miscommunication between the city and union.

For 10 months, both sides have wrangled over contract and pension issues in closed meetings.

Union officials say they are happy with the two-year contract adopted Thursday, which:

• Includes minor changes to paid leave

• Reflects improvements in recruitment and retention by eliminating annual extra pay of $500 for paramedics and $250 for emergency medical technicians

• Bars wage increases during the first year, but allows for negotiators to discuss raises or bonuses during the second year

Due to lengthy negotiations, firefighters are already months into the contract, which runs from October 2010 through September 2012. Zipeto said the union was up front with its members that, because of tough economic times, raises were off the table until at least October of this year.

"However, we said we're working with the city on this share plan. And we can front-end load it with benefit improvement," Zipeto said.

Each year, the city receives money from the state that must be earmarked to offset firefighter benefit costs. Anything above that amount goes into an excess reserve fund.

Dunedin human resources director Nancy Duggan helped bargain for the city. She said Dunedin managed to accumulate $832,000 in reserves since 1999 because the state barred the city from spending the money on anything other than extra benefits.

But she said the city already has been shelling out firefighter benefits that exceed state minimum requirements for years without getting proper credit "so we weren't going to pay twice." These extra benefits include allowing firefighters to retire after 20 years regardless of age and continuing to pay firefighters who are permanently disabled in the line of duty 60 percent of their salary versus the state-required 40 percent.

The ordinance presented Thursday would allow Dunedin to take part in a new measure that forces the state to credit cities for extra benefits they've paid.

The actuary report determined the city should be reimbursed for years of overpayment. But the union says its nearly yearlong contract talks with the city were based on estimates that firefighters would receive as much as half of the reserve money.

City negotiators counter that those estimates weren't based on final actuarial figures.

If adopted on second reading, the ordinance would create a share plan in which firefighters would receive 75 percent of any excess reserves in the future. But the share plan will start with a zero balance, and money will begin funneling into the share plan only if the excess reserves are over $283,000, union president George Treubig said.

That upsets the union, which said it agreed to the ordinance because firefighters wanted to help the city offset costs. The ordinance will reduce the city's yearly fire pension contribution by about $180,000.

In giving their initial approval, commissioners said negotiations had already gone on too long and urged both sides to begin working now on their next contract. At least one commissioner questioned why the firefighters agreed to the ordinance before seeing the final pension findings.

Firefighters say they were trying to negotiate in good faith.

"It really doesn't matter about the money. It could've been $2," Zipeto said. "But (getting nothing at all) wasn't what was represented and that's where the disappointment comes down to."

Keyonna Summers can be reached at ksummers@sptimes.com or (727) 445-4153.